Beltran v. Avon Products, Inc.

867 F. Supp. 2d 1068, 2012 WL 2108667, 2012 U.S. Dist. LEXIS 83060
CourtDistrict Court, C.D. California
DecidedJune 1, 2012
DocketCase No. 2:12-cv-02502-CJC (ANx)
StatusPublished
Cited by4 cases

This text of 867 F. Supp. 2d 1068 (Beltran v. Avon Products, Inc.) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beltran v. Avon Products, Inc., 867 F. Supp. 2d 1068, 2012 WL 2108667, 2012 U.S. Dist. LEXIS 83060 (C.D. Cal. 2012).

Opinion

ORDER GRANTING DEFENDANT’S MOTION TO DISQUALIFY PLAINTIFF’S COUNSEL

CORMAC J. CARNEY, District Judge.

I. INTRODUCTION AND BACKGROUND

Plaintiff Marina Beltran (“Plaintiff’) brought this nationwide putative class action against cosmetic company Avon Products, Inc. (“Avon”), alleging that Avon defrauded American consumers by marketing and advertising its products as being free of animal testing when, in fact, it tested on animals. Plaintiff is represented by the law firms of Eagan Avenatti, LLP (“Eagan Avenatti”) and the X-Law Group, P.C. (“X-Law Group”). Avon’s lead counsel is Dennis S. Ellis with the law firm of Paul Hastings, LLP (“Paul Hastings”). Shortly after Plaintiff filed suit, Avon moved to disqualify both firms representing Plaintiff under California Rule of Professional Conduct 3-310(E) on the grounds that Jason M. Frank, a partner with Eagan Avenatti, previously represented Avon in a products liability case and two consumer class actions when he was an attorney at Paul Hastings from 2001 to 2007. Mr. Frank spent over 300 hours working on Avon matters, for which Avon was billed over $100,000. Mr. Frank is not currently part of Plaintiffs litigation team. Given Mr. Frank’s prior representations of the company, Avon argues that Mr. Frank has actual knowledge of adverse confidential information. Avon argues that such knowledge is also presumed because the former and present Avon matters are substantially related. Avon further argues that although Mr. Frank is not counsel of record for Plaintiff, his conflict of interest is imputed to his firm as well as to the X-Law Group, such that both firms must be vicariously disqualified. Avon’s motion came on hearing on May 21, 2012. After carefully considering the parties’ papers, the record in this case, and oral arguments from the parties’ counsel, Avon’s motion is GRANTED. Under California law and the Rules of Professional Conduct, disqualification of Eagan Avenatti and the X-Law Group is warranted because Mr. Frank has both actual and presumptive possession of confidential information that is material to this case, and his conflict of interest is imputed to both firms.

A. Current Litigation

On March 23, 2012, Plaintiff filed the instant suit against Avon. (Dkt. No. 1.)1 [1073]*1073Plaintiff is represented by Michael J. Avenatti and Scott H. Sims from Eagan Avenatti as well as Filippo Marchino and Damon Rogers from the X-Law Group. Both Eagan Avenatti and the X-Law Group are small one-office firms, consisting of less than ten and four attorneys, respectively. (Ellis Decl., Exhs. F, G.) On March 28, 2012, Mr. Ellis and two of his colleagues from Paul Hastings filed their notice of appearance as counsel of record for Avon. (Dkt. Nos. 4-6.)

Plaintiff filed the operative First Amended Complaint (“FAC”) on April 23, 2012. (Dkt. No. 22.) In the FAC, Plaintiff seeks to represent in excess of one million consumers in the United States, including those in California, who purchased cosmetics from Avon during the period in which Avon allegedly made false or misleading representations that it did not engage in animal testing. (FAC ¶¶ 19-27.) Plaintiff alleges that around 1989 Avon banned animal testing and launched an extensive marketing and advertising campaign touting itself as a company that did not and would not test any of its products on animals. (Id. ¶ 9.) Plaintiff alleges that Avon’s marketing and advertising campaign consisted of (i) pledging to the People for the Ethical Treatment of Animals (“PETA”) that it did not and would test any of its products on animals to ensure the company’s placement on PETA’s “Do Not Test” list, (ii) representing on the company’s website that it did not conduct testing on animals, and (iii) representing to the company’s sales force — who, in turn, relayed to consumers — that Avon did not test any of its products on animals. (Id. ¶ 8.) In addition to these representations, Plaintiff alleges that Avon placed inadequate and misleading statements on its website around 2010 that it did not test any products on animals “ ‘except when required by law.’ ” (Id. ¶ 11.) Despite representations of being “cruelty free,” Plaintiff alleges that Avon did in fact conduct testing on animals in 1990, when the company began selling its products in China, and that the company knowingly and intentionally' continued to make representations to the contrary. (Id. ¶¶ 8-9, 13.) Plaintiff alleges that Avon’s representations of not testing on animals was material information to consumers, who, including Plaintiff, would not have purchased any product from Avon had they known the company tested on animals. (Id. ¶¶ 12, 18.) Plaintiff alleges that Avon reaped hundreds of millions of dollars in revenue by selling cosmetics to consumers who relied on the company’s false and misleading representations. (Id. ¶ 12.) Based on these allegations, Plaintiff asserts five causes of action against Avon for: (1) fraud/fraudulent concealment, (2) violations of California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof.Code §§ 17200 et seq., (3) violation of California’s False Advertising Law (“FAL”), Cal. Bus. & Prof.Code §§ 17500 et seq., (4) violation of California’s Consumers Legal Remedies • Act (“CLRA”), Cal. Civ.Code §§ 1750 et seq., and (5) injunctive relief. Plaintiff requests, inter alia, declaratory and injunctive relief, restitution, compensatory damages exceeding $100 million, and punitive damages. (Id., Prayer.) On May 7, 2012, Avon moved to dismiss the FAC and strike portions of the class allegations, set for hearing on July 2, 2012. (Dkt. Nos. 24-25.)

B. Jason Frank’s Prior Representations of Avon

Mr. Frank has been a partner at Eagan Avenatti since February 2009. (Ellis Decl. ¶ 3; Frank Decl. ¶¶ 1-2.) Mr. Frank is not one of the attorneys representing Plaintiff. (Frank Decl. ¶ 1.) Before joining Eagan Avenatti, Mr. Frank was employed at Paul Hastings as a summer associate, associate, and eventually partner from 1996 to 2009, with the exception of a two-[1074]*1074year period between June 1999 and February 2001 when he worked at another firm. (Ellis Decl. ¶¶ 3, 9; Frank Deck ¶ 2.) Mr. Frank and Mr. Ellis, a partner at Paul Hastings and Avon’s current lead counsel on this matter, have been colleagues and friends for over 15 years. (Ellis Deck ¶ 3; Frank Deck ¶ 3.) Avon has been a client of Paul Hastings for approximately 20 years. (Ellis Deck ¶ 2.) Since 2001, Mr. Ellis has represented Avon in several matters and has served as Paul Hastings’ “Relationship Partner” for Avon since 2004. (Id.) During his tenure at Paul Hastings, Mr. Frank worked with Mr. Ellis on several matters and shared the same legal assistant from 2001 to 2009. (Ellis Deck ¶ 3.). Specifically, while at Paul Hastings, Mr. Frank worked on the following three cases involving Avon as the defendant.

First, in 2001, Paul Hastings represented Avon in Beck v. Avon Products, Inc., a products liability action filed in San Mateo County Superior Court (Case No. 404423 [“Beck”]). (Ellis Deck ¶4 & Exh. A [Time Entries for Matter No. 34671-95669].) The plaintiff in Beck alleged that she suffered facial injuries following her use of Avon’s ANEW All-In-One Perfecting Complex, SPF 15. (Ellis Deck ¶ 4.) Mr. Ellis was the senior associate on the Beck case. (Id.) The plaintiff in Beck

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867 F. Supp. 2d 1068, 2012 WL 2108667, 2012 U.S. Dist. LEXIS 83060, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beltran-v-avon-products-inc-cacd-2012.